TOPEKA, Kan. – Payless ShoeSource Inc. said on Friday it will take a fiscal fourth-quarter charge of $43 million for a restructuring plan designed to speed up decision-making and cut operating expenses, and for closing 104 underperforming stores.
Payless, which operates 4,974 stores, said it expects to post earnings of 35 cents to 40 cents a share, excluding the $1.94-a-share charge, for the three months ending in January. Including the charge, it sees a loss of $1.54 to $1.59.
The company said it still expects a full-year profit of $3.86 to $3.91 a share, excluding charges. Including the charges, it sees the at $1.91 to $1.96, down sharply from $5.01 in the previous year.
Payless, which said it expects to open 75 to 80 stores this year, also backed its fourth-quarter view that sales at stores open at least a year will be down in the mid single-digits.
The fourth-quarter charge includes the closure of 104 stores, including 67 under the Parade name, and related costs from severance, lease terminations, asset write-offs and fees for services for developing the restructuring plan, Payless said. It said it expects to benefit by $25 million to $30 million from the restructuring actions.